Audit reveals government 'gift' to Nyeri coffee farmers was a loan
Coffee farmers affiliated to Baricho Coffee Cooperative Society in Mathira Constituency, Nyeri County during a meeting held at Karindundu coffee factory on November 14, 2024.
What you need to know:
- In September, Cooperatives Cabinet Secretary Wycliffe Oparanya and Mathira MP Eric Wamumbi visited the society to present a "gift" from President William Ruto.
- But little did the 7,000 coffee farmers know that what the MP called a debt waiver was a Sh63 million government loan.
The debt-ridden Baricho Farmers' Cooperative Society in Nyeri has been thrown into confusion after an audit revealed that a debt waiver granted by the government two months ago was a loan.
In September, Cooperatives Cabinet Secretary Wycliffe Oparanya and Mathira MP Eric Wamumbi visited the society to present a "gift" from President William Ruto.
Mr Oparanya and Mr Wamumbi told members that the President had given them about Sh63 million, ostensibly to bail them out of debt.
This was good news for a cooperative that is now reeling under a Sh300 million debt accumulated over the past two years.
But little did the 7,000 coffee farmers know that what the MP called a debt waiver was a government loan.
On Thursday, the farmers were stunned when an audit report commissioned by Mr Oparanya revealed that the 'gift' was an additional loan from the New Kenya Planters Cooperative Union (KPCU).
The beleaguered farmers will now have to pay the new loan at an interest rate of three percent.
Speaking at a special general meeting held at Karindundu Coffee Factory on September 9, Mr Oparanya said President Ruto had directed his ministry to launch an investigation into the alleged misappropriation of millions of shillings from coffee farmers.
The CS also ordered the Commissioner of Cooperatives, Mr David Obonyo, to start the probe immediately and submit a report within two months.
During the September meeting, Mr Oparanya accused former deputy president Rigathi Gachagua of failing to turn around the coffee sub-sector as mandated by his boss.
“I was directed by the president to convene this meeting following an outcry by farmers. The president has heard your cry and the government has allocated Sh63 million,” Mr Oparanya said.
Mr Wamumbi, who was accompanied by his Nyeri Town counterpart Duncan Maina and Nyeri Senator Wahome Wamatinga, told the farmers that he had come to deliver the good news from the President.
“I managed to meet the president who has offered to relieve farmers of their debt burden,” he said.
However, when the investigation report was read to them on Thursday, the farmers were in for a rude shock when it was revealed that the society owes Sh300 million including the Sh63 million “gift” from the President.
The report, read by Mr Philip Ouma from the office of the Commissioner for Cooperatives, showed that the society owes the New KPCU Sh97 million, including the Sh63 million that was supposed to be a debt waiver.
Mr Ouma said that according to available documents, the Sh63 million was part of the loan given to the society by the New KPCU.
“We can’t believe what we have just heard in that report. All along, we believed the President had waived the Sh63 million debt only to be told that it was a loan,” said Mr Gilbert Gicheru. “Why heap debt upon debt without revealing this to us? How can government officials lie to farmers? We are very disappointed.”
Mr Wamumbi, who did not attend the meeting, could not be reached for comment on the outcome of the audit. He did not respond to the Nation's enquiries.
The audit report also highlighted alleged financial malpractices by some officials of the society, including about Sh14 million curiously spent on “public relations” in one year.
It was recommended that former officials found culpable should be surcharged. Nine officials were suspended and replaced by an interim committee to pave the way for the audit.
The society was also advised to hold elections within a month to implement the report's recommendations.
